Yeah I have a slight problem with my 87 300E... After 5-10 minutes of driving time the temp gauge hits 120°C. The aux fan does not turn on. I changed the thermostat and still I have the same problem. I talked to some merc parts guys at the dealer they said it may be the temperature sensor (part # 006 545 64 24). I don't know what to do? Any help is apprecaiated.

Do a search.
If you pull the connector off at the temp switch and the aux fan does not come on then it is something else. Look for the fuse. I am not sure exactly where it is for this model but on the '95 E320 it is behind the regular fuse box underneath the black plastic cover. It is plugged into a relay.
There are a few items that need to be checked. Some of them are:
a) aux fan fuse
b) fan clutch
c) "clearness of water passages - has the system been properly maintained? Coolant flush/changes every year or so?
d) feel the temp of the radiator accross the top - is the temp the same all the way accross?
You get the idea - the list goes on and on - do a search and read all about it.